Rethinking Energy Conservation in Ontario – Results:Electric Vehicle Goal
| In November, 2010, the ECO released volume 2 of its Annual Report on the progress of activities in Ontario to reduce or make more efficient use of electricity, natural gas, propane, oil and transportation fuels. Click here for more information on this report, including videos and communications materials. | |||||
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In July 2009, the government announced Ontario’s objective to become a world leader in building and driving electric cars. The government released an electric vehicle plan with a goal that, by 2020, one out of every 20 vehicles driven in Ontario would be an electric vehicle.
In explaining this goal to the ECO, the Ministry of Transportation (MTO) stressed that this metric is not a target but rather represents a vision or challenge to Ontario residents and businesses to support the introduction of electric vehicles (EVs) through their purchasing and manufacturing decisions. The government also committed to lead the way in building consumer demand by adding 500 EVs to the Ontario Public Service fleet by 2020.
As part of the EV plan, the government established an incentive policy whereby purchasers of plug-in hybrid and battery EVs benefit from two incentives. The first is an incentive ranging from $4,000 to $10,000 for EVs purchased after July 1, 2010. The second is a green vehicle license plate that would allow single occupant vehicles access to High Occupancy Vehicle (HOV) lanes on provincial highways.
In June 2010, shortly before the incentives would have come into effect, the government made another announcement reflecting changes to the policy and providing further details on its application. The scale of the incentive was changed to start at $5,000 and range up to a maximum of $8,500, depending on the battery size of the vehicle. In addition, the number of incentives provided was limited to the first 10,000 qualifying vehicles.
Approximately $84 million has been committed to the Electric Vehicle Incentive Program to be provided for the period July 1, 2010 to March 31, 2015. A mid-program review is scheduled for 2012/2013 to evaluate success.
Results
In response to an information request made by the ECO, the Ministry of Economic Development and Trade (MEDT) advised that the scale of incentives had been adjusted after stakeholder consultations to recognize innovations that could be implemented on vehicles to achieve cost efficiencies in EVs (other than using larger capacity batteries). MEDT further explained that the purpose of the incentive is to provide short-term support to increase consumer adoption of EVs and the 10,000 vehicle cap for incentives acknowledges the temporary nature of the incentive.
In addition to financial incentives, the government committed to building public charging infrastructure in government and GO Transit parking facilities. At the time of writing, a list of government facilities that will provide charging stations has not been made available. In response to an ECO information request, the former Ministry of Energy and Infrastructure informed the ECO that it is “seeking direction” on the location of the charging facilities. There are currently plans to install EV recharging facilities at 10 GO Transit stations with 2 stations expected to be ready for early 2011. MTO has also committed to launching an EV public education campaign in 2011.
Issues and ECO Comment
Since the government has provided incentives ahead of market availability of EVs, the mid-program review may not be effective in determining the success of the rebates. Applications will likely be limited during the first year of the program. Although the incentives became available in July 2010, the only eligible EV in production as of October 2010 is the Tesla Roadster – a luxury electric sports car. The first mainstream EVs are not expected to be available in Canada until 2011 to 2012, and even then in limited numbers.
The ability to achieve the goal of “1 in 20 by 2020” will depend on more than the purchase price of the vehicle and a handful of recharging stations. A combination of variables will affect the future of EVs, including vehicle technology, consumer education and preferences, the market availability of vehicles and charging infrastructure, and the capacity of the electricity distribution system to serve the demand. Also, once an EV is acquired, its effect on energy savings and emissions depends on factors like distance driven, where and when charging occurs, efficiency of the electric drivetrain, and the electricity supply mix. The ECO believes that Ontario will need a more detailed and comprehensive plan to address these multifaceted issues, and urges the Ministry of Transportation to lead the development this plan.
